Vacant Properties: Bad news or golden opportunities?
The 2009 demolition of the Penn Circle high-rise at 6231 Penn Ave. in Pittsburgh's East Liberty neighborhood made way for a new Target store.
A vacant filling station occupies the corner lot of Larimer Avenue and East Liberty Boulevard. The three blocks between East Liberty Boulevard and Meadow Street have only nine buildings remaining.
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East Liberty Development Inc. was still figuring out how to jump-start the housing market in the Pittsburgh neighborhood when it built 10 houses on Mellon Street across from a handful of vacant and blighted buildings. At $105,000 for three bedrooms, a bath and a half, a two-car garage and a zero-percent second mortgage for income-qualified buyers, the homes were priced to sell.
None of them did.
"Nobody was willing to buy on that block until we were able to tell them a good story, something concrete, about what was going to come about across the street," said Kendall Pelling, project manager for the community development corporation.
"We learned from experience that vacant and abandoned properties have a terrible impact on the housing market."
Others are getting a similar education. Vacant and blighted properties are increasing across southwestern Pennsylvania, the state and the nation, robbing local governments of tax revenue, consuming millions of tax dollars, eroding housing values, posing health and safety risks and complicating the challenging job of reviving distressed neighborhoods.
If there is a bright side to the growing problem, it lies in the opportunity vacant properties offer to redesign neighborhoods in ways that are better suited to their down-sized populations. That includes widening narrow lots found in many former industrial towns to accommodate fewer but more marketable parcels and turning empty lots and buildings into greenways, community gardens, recreational space and other amenities that give housing markets more appeal.
"Any community that has blighted and abandoned properties and sees them only as a strain and a drain is undervaluing the real estate," said Court Gould, executive director of Sustainable Pittsburgh, which last year published a comprehensive report on vacant property in southwestern Pennsylvania. "We need to be thinking about those properties as stranded economic assets."
East Liberty Development Inc. got the message. The new houses on Mellon Street sold after the nonprofit bought the properties across the street and came up with a plan to renovate some of the vacant houses and build new ones on the other lots.
Recent Pennsylvania legislation offers municipalities, community organizations and residents a more expansive menu of legal options to deal with neglectful landlords, absentee owners and the vacant and blighted properties next door.
But when dealing with tens of thousands of vacant properties, effective intervention comes down to a question of scale. The percentage of vacant housing in the county jumped from 6.8 percent to 9.4 percent over the past two decades -- a trend experienced in every county in the region, according to U.S. Census data. More than 55,000 housing units, including apartments, stand vacant. And the Census Bureau doesn't count vacant lots, which greatly outnumber vacant houses.
In Allegheny County, a program for turning tax-delinquent vacant properties into community assets doesn't come close to keeping pace with the rate at which properties become vacant. And the story is the same throughout southwestern Pennsylvania.
"Even if we did 1,000 properties this year -- and we won't -- I would have a job for life," said Richard Ranii, who oversees the program as manager of the Housing and Human Services Division of the Allegheny County Economic Development Department.
Shifting, aging or declining population, weak housing markets, poor housing stock, crime, underperforming schools and other factors that make some communities less than desirable places to live all contribute to vacancy and blight. High mortgage-foreclosure rates, decimated job markets and other consequences of recession have exacerbated the problem.
Antiquated tax-foreclosure systems can take years to move against delinquent properties, and many accrue several years' worth of delinquent taxes and penalties.
"There isn't a place I go where someone doesn't talk about a problem property they are frustrated with," said Irene McLaughlin, an attorney and consultant on vacant-property issues for the Housing Alliance of Pennsylvania and others.
Nine percent of the housing in the seven-county Pittsburgh Metropolitan Statistical Area is vacant, up from 6.8 percent in 1990.
Cities tend to have higher concentrations of vacant property, and Pittsburgh is no exception with nearly 13 percent of its houses and apartments standing vacant.
Even higher concentrations are found in poor urban neighborhoods and municipalities that have endured decades of economic decline. In other words, the places shouldering the heaviest burden are the most fragile and the least likely to have the resources to do something about it.
While those living on blight-ridden streets are the most directly affected, studies suggest the economic and social costs of long-standing vacancy are widely shared.
What those costs amount to in southwestern Pennsylvania is unclear. Pittsburgh's year-old Land Recycling Task Force, planning department and others are working on an analysis of the economic impact on the city. And there is no countywide or regional accounting of the total cost of vacant property.
Philadelphia is one of the few places that examined those costs. Its 2010 study found that vacant properties reduce market values by 6.5 percent citywide and by as much as 20 percent in high-vacancy neighborhoods, resulting in an average loss in value of $8,000 for each city household.
Tax-delinquent vacant properties in Philadelphia owe an estimated $70 million in back taxes, a sum that grows by $2 million every year. And vacant properties consume $20 million in city services a year, including $8 million on code enforcement and maintenance and close to $6 million on police and fire calls.
When housing values plummet, those who are hurt the most include longtime homeowners, many of them senior citizens -- the very people who tend to hold together what is left of declining neighborhoods.
"We got a call last year from an elderly woman in one of those neighborhoods," said Rob Stephany, director of the Pittsburgh Urban Redevelopment Authority.
"She had a $9,000 bid from a contractor to replace her roof, which had started to leak. Her next-door neighbor's house had sold for less than that, about $7,000. Here was a responsible, salt-of-the-earth Greatest Generation senior citizen asking whether she should repair her roof or just ride it out. That is loss of equity."
Vacant and blighted properties also play a role in unraveling the quality of life in a neighborhood and dimming the outlooks of those who live there.
For Malik Bankston, one of the challenges of taking control of vacant properties in Larimer and then creating gardens, parks and a safer place to live was convincing residents that it could be done.
"It was tough getting a conversation going," said the Kingsley Center director. "For so long, the neighborhood watched a deliberate kind of disinvestment play out, which resulted in us having one of the highest incidence of vacant and blighted property."
More than 42 percent of the lots, houses and buildings in Larimer are unoccupied. And, like most neighborhoods with high rates of vacant and blighted property, crime rates are higher than citywide averages -- in Larimer's case, 30 to 50 percent higher.
The flip side of vacant and blighted properties is that under the right circumstances they can be used to improve conditions in the neighborhoods they helped lead down a path of decline. In southwestern Pennsylvania, both public and private sector interest in reclaiming vacant property to add elbowroom and a little green to crowded urban neighborhoods is growing.
"With a lot of liabilities, your only option is to eliminate or reduce them. To be able to turn a liability into a asset is a unique opportunity," said Frederick Thieman, executive director of the Buhl Foundation, which funded the Sustainable Pittsburgh report on vacant property in southwestern Pennsylvania. "Vacant property provides us with such an opportunity."
Demolition is a common municipal response to abandoned houses.
Clarksburg, W.Va., took a low-interest state loan to finance a campaign against the blight that had accumulated during decades of economic decline, tearing down nearly 300 homes.
More than half of the 900 vacant houses acquired by a public land bank in Cuyahoga County, Ohio, last year have been razed.
"It's like cleaning the cancer cells out of the body so the rest can be healthy," said Frank Ford, vice president for research and development at Neighborhood Progress Inc., a Cleveland neighborhood-development agency.
"It's hard for me to say that. Like most of my colleagues, I was a preservationist 20 years ago. We rehabbed houses. That's not feasible now. The market isn't going to come back until we clear out the bad stuff and allow it to come back."
"Greening" vacant lots is an increasingly popular strategy for helping turn around distressed neighborhoods.
In Pittsburgh, the city's Green Up Pittsburgh program has put hundreds of vacant lots in the hands of community groups and residents who use them as neighborhood green spaces and side yards. Pennsylvania added a number of legal tools to help combat vacancy and blight in recent years. The state's new conservatorship act, for example, allows community groups and others to petition courts to appoint a third party to take temporary possession of a blighted property, rehabilitate or demolish it, and then offer it back to the owner for the cost of the work done or sell it under court supervision to someone else.
But the consensus best practice for tackling vacant property on a large scale is not available in Pennsylvania. Genesee County, Mich., and Cuyahoga County in Ohio are showing how land banking and property tax reform can be used across entire counties to take control of thousands of vacant tax-delinquent properties, keep them out the hands of slumlords and speculators and manage them as community assets.
In June, legislation to empower land banks was introduced in the Pennsylvania House by state Rep. John Taylor, R-Philadelphia. The bill, which received the endorsement of Pittsburgh Mayor Luke Ravenstahl, is under consideration in the House Urban Affairs Committee.
But costs are an issue, and spending money makes many municipal officials nervous, particularly when most face serious budget shortfalls.
"We run into that all of the time," said Dan Kildee, a former Genesee County treasurer who now directs the Center for Community Progress, a nonprofit that specializes in vacant property issues. "But it ignores the costs taxpayers already pay for vacant property and abandonment. Anybody who argues that the current path we're on is the right one isn't examining the full cost of vacant and abandoned property."
First Published September 18, 2011 12:00 am